2017 (11) TMI 1527 - AT - Customs

Confiscation - allegation of smuggling not established - Held that - this Tribunal have categorically held that if the allegation of smuggling is not established confiscation is bad, as have been held by the Coordinate Bench ruling of this Tribunal in the case of M.B. Enterprises v/s CC, New Delhi - on the basis of such findings, holding the goods liable to confiscation under Section 111(d) of the Act is misplaced and erroneous, leading to miscarriage of Justice - confiscation, redemption fine and penalty set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Allegation of smuggling and confiscation of goods under Section 111(d) of the Customs Act.
2. Error in holding goods liable to confiscation and imposition of penalty under Section 112 of the Customs Act.

Analysis:
1. The judgment addresses the issue of smuggling and confiscation of goods under Section 111(d) of the Customs Act. The Tribunal considered the contention that mobile phones were not notified under Section 123 of the Customs Act, placing the onus on Revenue to prove that the goods were smuggled. It was noted that the Bills of Entry for import of mobile phones did not mention individual phone details, and the Revenue failed to establish with sustainable evidence that the goods were smuggled. The Tribunal cited precedents emphasizing Revenue's burden to prove smuggled nature of goods, leading to the conclusion that the allegation of smuggling was not established.

2. The judgment further dealt with the error in holding the goods liable to confiscation under Section 111(d) of the Customs Act and imposing penalties under Section 112. The Tribunal referred to previous rulings where if the allegation of smuggling is not established, confiscation is deemed improper. Citing cases like M.B. Enterprises v/s CC, New Delhi and Naveed Ahmed Khan v/s Commissioner of Customs, Bangalore, the Tribunal concluded that holding the goods liable to confiscation was erroneous and led to a miscarriage of justice. As a result, the Tribunal allowed the applications, modifying the Final Order to declare the goods not liable for confiscation or penalties under the Customs Act.

3. The judgment also addressed a specific ruling of the Hon'ble Delhi High Court in the case of Pacific India Trade Concern, highlighting the distinction in facts between that case and the present appeals. It was noted that the facts in the Delhi High Court ruling involved imported cosmetics without MRP stickers, cleared for sale to end users, which differed from the seized goods in the present case. The Tribunal found the High Court ruling distinguishable and not applicable to the current situation where goods were seized in the open market. Consequently, the Tribunal allowed the applications and granted consequential benefits to the appellant in accordance with the law.